Information about Middle East Oriente Medio
Journal Issue

Republic of Tajikistan: Fifth Review Under the Poverty Reduction and Growth Facility and Request for Waiver of Performance Criterion Supplementary Information

International Monetary Fund
Published Date:
October 2005
  • ShareShare
Information about Middle East Oriente Medio
Show Summary Details

1. This supplement provides an update on recent economic developments and the implementation of structural measures since the staff report for the fifth review under the PRGF arrangement was issued. It does not change the thrust of the staff appraisal.

2. Economic conditions remain broadly as described in the staff report. Preliminary data indicate that real GDP grew by 8 percent in the first half of 2005, in line with program projections. Headline inflation (12-month basis) rose slightly to 8.8 percent in June 2005, on account of higher transportation costs and electricity prices (see below) and a small depreciation of the somoni.

3. Continued prudent fiscal and monetary policies have kept the financial program on track. Preliminary data indicate that the end-June 2005 indicative targets for the net domestic assets of the National Bank of Tajikistan (NBT), net credit of the banking system to the government, net international reserves, and reserve money were observed. A large buildup in government deposits at the NBT appears to be related to a robust revenue performance in June. Net international reserves were $10 million above the end-June program target of $64 million.

Monetary Performance, end-June 2005

(In millions of somoni; unless otherwise indicated)



targets (adj.) 1/
Ceiling on net domestic assets of the NBT826432
Ceiling on net credit of the banking system to government-196-214-285
Floor on net international reserves (millions of U.S. dollars)586474
Reserve money (indicative target)257257257
Sources: National Bank of Tajikistan; and Fund staff estimates.

Adjusted for the unanticipated disbursement of a loan from the Asian Development Bank ($5.8 million).

Sources: National Bank of Tajikistan; and Fund staff estimates.

Adjusted for the unanticipated disbursement of a loan from the Asian Development Bank ($5.8 million).

4. Recent structural actions (Box 1) were:

  • On July 2, the strategic planning functions of the presidential administration and the Ministry of Economy and Trade were rationalized, in line with the March 2005 structural benchmark. As part of ongoing reforms in this area, the new national development strategy will provide for greater participation of the civil society, and will seek to better integrate the country’s growth objectives with poverty reduction, the MDGs, and development assistance. This new approach is being supported by the UNDP and the Millennium Project.
  • NBT debt recoveries through early July remained at SM 4 million. The expected realization of the collateral provided for one loan could yield a further SM 5 million in the third quarter, if approved by the State Property Committee.
  • In June, additional companies were added to the large taxpayer inspectorate (LTI), including mobile phone operators and the branches of banks that previously were not included in the LTI. This brought the coverage of the LTI to 61 percent of tax collections.
  • The database for private external debt became operational in early July. Preliminary information indicates that the private external debt amounts to $226 million and is mainly related to the financing of the cotton sector. The data are being reviewed in the context of the strategy for the resolution of the cotton sector debt.
  • In June, electricity tariffs for households were doubled to about the same level applied in winter. This step is expected to encourage greater involvement of foreign investors, the World Bank Group, and other multilateral lenders in the rehabilitation of the electricity sector.
  • On July 4, the NBT started to adjust the official exchange rate on a daily basis using the weighted average exchange rate for all bank transactions. As a result, the differential between the official exchange rate and the exchange rate in the cash market has been virtually eliminated.

Box 1.Tajikistan: Performance Under the Third Annual Program Under the PRGF Arrangement, May-July 2005


(as of July 12, 2005)
Indicative targets (June 2005)
Ceiling on net domestic assets of the NBT.Observed
Ceiling on net credit of the banking system to general government.Observed
Ceiling on the cumulative overall fiscal balance of the general government.Data not yet available
Ceiling on general government wage and nonworking pensioners’ pension arrearsData not yet available
Floor on tax collection of the ministry of state revenues and duties.Data not yet available
Floor on net international reserves.Observed
Ceiling on the contracting or guaranteeing of short-, medium-, and long-term nonconcessional external debt.Data not yet available
New external payments arrears (continuous quantitative performance criterion).Data not yet available
Ceiling on reserve money.Observed
New arrears of budget entities and key state-owned enterprises to utility companies.Data not yet available
Continuous structural performance criteria (through end May 2005)
Prohibit the NBT from issuing directed credits.Observed
Prohibit the NBT from making expenditures not related to its core business.Observed
Implement quarterly adjustments of all utility tariffs, equivalent to the depreciation in the nominal exchange rate in the previous quarter.Observed
Structural benchmarks
For end-March 2005
Implement the mechanism to ensure the immediate transfer to the Treasury by Barki Tajik of the tax portion of TADAZ’s payments to Barki Tajik.Observed in April
As part of streamlining economic ministries, cease publication of detailed production targets disaggregated below the national level. Integrate various bodies preparing strategic plans and coordinating aid.Observed in July
For end-June 2005
Reduce NBT’s claims on the private sector by SM 10 million from October 2004 to June 2005 through collateral sales or other loan recoveries.SM 4 million collected by early July, remainder pending approval of sale of collateral
Remove the regulatory limits on foreign capital in the banking system and the requirement in the Banking Law that Tajik citizens to head commercial banks.Amendments submitted to parliament in early July
Expand the register of the Large Taxpayer Inspectorate (LTI) to cover at least 60 percent of total tax collections.Observed
Develop and continuously update a database at the NBT for monitoring private sector external debt (starting with cotton sector debt).Observed in early July

Other Resources Citing This Publication